Engagement: Driven to Sustain Positive Change

Kirk Hazen, P.E.Quality and Reliability Manager

The World

• Who we are• Definition of Engagement• Culture as a Foundation for Implementation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

Agenda

• History and Stats:• Founded in 1952 • 450 PEOPLE in a 24/7 operation• Revenue in excess of $100 million• 40+ finishing processes• One of the largest US Independent

Finishing Companies• Quality Certifications:

• TS 16949 and ISO9001 certified• ISO14001 certified

• Customers:• Harley-Davidson• Pella Corporation• Maytag• Tenneco Automotive• PACCAR• Freightliner

Who we are

In 2010, we have achieved 20% growth by

leveraging current processes and developing

further capabilities.

Company Growth

• Who we are• Engagement Definition• Culture as a Foundation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

What is Engagement?

There are several definitions of engagement, at Lincoln Industries we define engagement in the following terms.

1.A heightened emotional and intellectual connection that a person has for their job, organization, manager, or coworkers that, in turn, influences them to apply additional discretionary effort to their work.

2.The extent to which people commit to something or someone in their organization which determines how hard they work and how long they stay as a result of that commitment.

Engagement

What does that look like in an organization?

The proceeding definitions manifest themselves in the following observations:

1.Perform beyond their job title because they WANT to NOT because they HAVE to.

2.Consistently perform at a level exceeding the minimum requirements in effort and impact.

3.Take more responsibility and ownership of organizational performance.

4.Anticipate and adapt to change more fluidly.5.Speak well of the organization to their friends and family

members.

Engagement

• Who we are• Engagement Definition• Culture as a Foundation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

“No one cares how much you know until they know how much you care.” Author Unknown

People

“People making a difference.”

People

“Those who build great companies understand that the ultimate throttle on growth is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”

Jim Collins, Good to Great

People

• Quarterly One Company - One Voice meeting

• Quarterly SHINE Newsletter

• Monthly Roundtable meeting

• Monthly Profit Sharing Letter

• Daily Pre-shift meetings

• Continuous Streaming Information on The LINC

Photo from one company one voice or roundtable

Communication

• “Go Platinum” – categories for wellness achievement including a platinum invite for 14,000 ft mountain climb

• Wellbucks – financial incentive for wellness participation

• Weight management

• Tobacco cessation

• Mayo Clinic newsletter for all people

• “Wellness Wednesday”

• Gym reimbursements

• Consumer driven health care

• Tobacco-free health insurance discounts

Wellness Program

• Monthly Champions• Annual Night of Champions• Service recognition• Safety recognition• Environmental recognition• Wellness recognition• Quality recognition• Birthdays and Anniversaries

2004 (25), 2005 (20), 2006 (11), 2007 (11), 2008 (20)

Recognition

• Individual Opinion survey

• Departmental survey

• Supplier survey

• Customer survey – Gallup

• Trust survey - Great Places To Work®

Cultural Measurements

• Who we are• Engagement Definition• Culture as a Foundation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

A successful project needs both chickens and pigs.

However, given the sacrifice required of being a pig—forswearing other projects and opportunities—they can be difficult to collect.

Thus, the construction of a successful project-team must ensure that the project has sufficient "pigs" and that they are empowered to drive the project in return for committing to and taking accountability for it.

Commitment

Beliefs and Drivers

The Beliefs and Drivers are paramount to the success of our organization.

These values are not just something on the wall, they are discussed and modeled on a daily basis at Lincoln Industries.

These core truths provide the “Due North” that we need to keep on track directionally.

How nimble is your organization to change?

Will your team respond quickly to clear expectations?

**Patrick Lencioni – 5 Dysfunctions of a Team

Driving Change

• Who we are• Engagement Definition• Culture as a Foundation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

• SAFETY– Our people’s well-being is of the utmost importance– Safe processes are paramount to our business

• QUALITY– Robust and repeatable processes will provide quality products consistently

• DELIVERY– We must meet our customers needs with the right parts at the right time and in

the right amount

• PRODUCTIVITY– We must continue to strive to produce a product that meets our customers

expectations at the best cost possible

Decision Making Hierarchy

– The creation of value through the elimination of all types of waste.

– The value stream. All the activities required to put a finished product in the hands of the customer.

– Improving process flow to reduce lead times and inventory.

– Producing based on pull instead of push-based scheduling.

– Perfection of all processes and tasks

Lean Principles

efective Products

verproduction

aiting

on-utilized resources

ransportation

nventory

otion

xtra Processing

DDOOWWNNT T IIMMEE

Value

Value Stream

1. Strive for One – Piece – Flow

“Handle each part ONLY once and ONLY handle one part at a time.”

2. Create continuous flow to each process and through each process

Flow

1. Build based on customer demand

Your customer may be external or internal.

Work to eliminate overproduction and the assumption of good quality.

2. Replenishment of ONLY products that are required

Pull

1. Safety

• Zero – Injury

2. Quality

• Zero – Defects

3. Delivery

• 100% On-Time Delivery

4. Productivity

• Best Cost Method

Perfection

• Daily Operational Meetings• The operations team meets daily to discuss the prior 24 hours

performance and develop countermeasures to issues that were encountered (Safety, Quality, Delivery, Productivity)

• Weekly Directional Meetings• The operations team meets weekly to discuss the prior week performance

and understand demand and improvement opportunities going into the next week.

• Monthly Strategic Meetings• The operations team meets monthly to review the prior months

performance and identify priorities for the upcoming month related to improvement opportunities

Managing Daily Improvement

Operations Dashboard

Continuous Information Availability = Knowledge = Engagement

Managing Daily Improvement

Pareto Analysis

Pareto charts are available with just a click to understand what the driving issues are behind any metric on the dashboard that is not meeting the target.

Managing Daily Improvement

• Who we are• Engagement Definition• Culture as a Foundation• Commitment at ALL Levels• Method/Tools to Track Performance• Lessons Learned

• It takes a CRISIS to change

– What is your crisis? Economic, Changing Regulation, Customer Demand

• You must gain the TRUST of your people

– What is in it for everyone? Win-Win

• Attain COMMITMENT at every level

– How does senior leadership demonstrate their commitment? Gemba Walks, Kaizen Events

• Set clear EXPECTATIONS– How do people know what they need to do? Breakthrough Deployment, Visual

Management

• Hold everyone ACCOUNTABLE to what they say they will do

– What mechanisms do you have in place to facilitate this accountability? PDCA

• We must be able to MEASURE the improvement

– What are the metrics that will set the direction and show improvement? SMART

• Continually CELEBRATE successes and learn from mistakes

– How do you celebrate positive changes that are made? Recognition

Lessons Learned

• 2006– (6) Kaizen Events– Approx. - $300k Savings Realized

• 2007– (27) Kaizen Events– Approx. - $650k Savings Realized– Over 75 participants in Kaizen Events

• 2008– (33) Kaizen Events– 50% Scrap Reduction– Approx. – $1.7M Savings Realized– Over 150 participants in Kaizen Events– EVERYONE in the company through at least

2 hours of Lean training

• 2009– 30% Scrap Reduction– $1M in Energy Savings

• 2010– 35% Scrap Reduction– 20% Revenue Growth– $1M in Productivity Improvement– Managing for Daily Improvement (MDI)

Kickoff– Development of Cost of Poor Quality

(COPQ) metric– EVERYONE involved with daily waste

identification and improvement implementation

Lincoln Industries Lean Journey

Thank you!

Kirk L. Hazen, P.E.Lincoln Industries